Multiple choice

What is the main attribute of a Gilt-Edged stock?

  1. Bonds issued by the government whose likelihood of default is zero

  2. A stock backed by gold.

  3. Stocks which are linked to the inflation rate

  4. Stocks doing well in the capital market

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A Correct answer
Explanation

Gilt-edged stocks are high-quality bonds issued by governments (typically) with minimal default risk. The term refers to securities with the highest credit quality and reliability, historically linked to the gold-edged certificates used by the Bank of England.

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